Enhancing Domestic Revenue Mobilisation with a National Tax Lottery: Prospects for Consumer Acceptance and Engagement

Anculien Schoeman

doi:10.25159/1998-8125/16347

Authors

Anculien Schoeman University of Pretoria https://orcid.org/0000-0002-4026-4102

DOI:

https://doi.org/10.25159/1998-8125/16347

Keywords:

tax lottery, revenue mobilisation, tax compliance, incentives, South Africa

Abstract

Purpose: Transitional and developing countries need to boost revenue collection by improving citizens’ tax compliance. This research explores potential consumer acceptance of and engagement with a tax lottery system designed to improve domestic revenue mobilisation by targeting non-compliant businesses. Various countries use lotteries to enhance overall tax compliance, and, in turn, increase revenue collection.

Design: An online survey that delivered 2,774 valid responses from a wide range of respondents in South Africa finds that consumers would accept and engage with a tax lottery system and that they would shift their patronage to other businesses if one refused to issue them with the requested receipt.

Findings: Various demographic variables, including gender, monthly spend, and household size, can act as predictors of which types of consumers would be more likely to “buy into” or accept a tax lottery system. A positive perception of fairness (attitude) towards the tax lottery system also increases the likelihood of consumers accepting such a system.

Value: This study adds to the limited empirical studies that have explored tax lottery systems, especially from an African perspective. Revenue authorities can replicate the survey, and potentially use the current study’s results to determine whether implementing a tax lottery system would be viable. Predictors of supporters could also assist revenue authorities with targeted advertising of the system.

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